We have initiated a project to sequence the 3 Mbp genome of the thermoacidophilic archaebacterium Sulfolobus solfataricus P2. Cosmids were selected from a provisional set of minimally overlapping clones, subcloned in pUC18, and sequenced using a hybrid (random plus directed) strategy to give two blocks of contiguous unique sequence, respectively, 100,389 and 56,105 bp. These two contigs contain a total of 163 open reading frames (ORFs) in 26-29 putative operons; 56 ORFs could be identified with reasonable certainty. Clusters of ORFs potentially encode proteins of glycogen biosynthesis, oxidative decarboxylation of pyruvate, ATP-dependent transport across membranes, isoprenoid biosynthesis, protein synthesis, and ribosomes. Putative promoters occur upstream of most ORFs. Thirty per cent of the predicted strong and medium-strength promoters can initiate transcription at the start codon or within 10 nucleotides upstream, indicating a process of initial mRNA-ribosome contact unlike that of most eubacterial genes. A novel termination motif is proposed to account for 15 additional terminations. The two contigs differ in densities of ORFs, insertion elements and repeated sequences; together they contain two copies of the previously reported insertion sequence ISC 1217, five additional IS elements representing four novel types, four classes of long non-IS repeated sequences, and numerous short, perfect repeats.